Annuity Calculator
Estimate the accumulation of a regular fixed savings plan: final balance (future value), total deposits and total return.
Input Data
Results
At a glance:An annuity is a series of equal payments made at fixed intervals over a set period. This tool uses the ordinary-annuity (end-of-period) accumulation model to compute the final future value from an initial deposit plus fixed periodic contributions under compounding. Final balance = initial deposit × (1 + i)^n + periodic deposit × [((1 + i)^n − 1) ÷ i], where i is the periodic rate and n is the total periods. It is common in retirement savings, education funds and the Mandatory Provident Fund (MPF); the earlier you start, the stronger the compounding effect.
Formula
Periodic rate i = annual return ÷ contributions per year; total periods n = years × contributions per year.
Final balance = initial deposit × (1 + i)^n + periodic deposit × [((1 + i)^n − 1) ÷ i].
Total deposits = initial deposit + periodic deposit × n; total return = final balance − total deposits.
$$FV = P_0 (1 + i)^{n} + PMT \\times \\dfrac{(1 + i)^{n} - 1}{i}$$How to Use
- Enter the initial deposit (0 if none) and monthly fixed deposit.
- Enter the expected annual return and saving term.
- View the final balance (future value), total deposits and total return.
FAQ
What is the difference between an ordinary annuity and an annuity due?
An ordinary annuity makes the payment at the end of each period; an annuity due makes it at the beginning. Because money paid earlier starts earning interest one period sooner, the annuity due ends with a slightly higher final balance. This tool uses the ordinary-annuity (end-of-period) model, which fits most monthly savings and regular-investment plans.
How often is interest compounded?
This tool assumes the compounding frequency matches the contribution frequency — monthly contributions compounded monthly. If your product compounds at a different frequency, the actual result will differ slightly; most regular-savings and monthly-premium plans compound monthly, so the difference is usually small.
What return rate should I enter?
Enter a reasonable long-term expected annual return. A conservative time deposit might be only 1%–3%, while a balanced fund portfolio has historically returned about 4%–7%, though past performance is no guarantee. Try several rates to see the gap between optimistic and conservative scenarios.
Is this 'annuity' the same as the annuity products sold by insurance companies?
The concept is related but not identical — keep the 'accumulation' and 'payout' stages separate. This calculator handles the annuity's accumulation stage: you make regular fixed contributions over a period and compounding grows the fund to a final value (future value), similar to estimating the growth of a monthly savings or regular-investment plan. Insurance 'annuity products' sold in the market (such as Hong Kong's Qualified Deferred Annuity Policy, QDAP, or an immediate annuity) usually also include a payout stage: after accumulating a sum (or a lump-sum premium), the insurer pays you a fixed or guaranteed income during retirement, for a set term or for life. So a full annuity product is typically a two-stage 'accumulate first, then pay out' arrangement; this calculator covers only the first-stage accumulation and does not handle the payout, guaranteed income, death benefits or surrender value. Moreover, real products deduct premium and administration costs, so their internal rate of return is usually below the nominal rate you enter, though they may offer tax deductions (e.g. QDAP premiums are tax-deductible). For evaluating a specific insurance annuity, always rely on the policy illustration and its guaranteed/non-guaranteed returns; this calculator is best for a quick estimate of pure savings accumulation or as a benchmark against a product's return.
If I want to know 'how much I can draw each month in retirement', which calculator should I use?
This calculator solves the accumulation problem — how much you contribute regularly and what it grows to (future value). If you care about the opposite, the payout problem — you have a retirement pot and want to know how much you can safely draw each month over a given return and withdrawal period — use our Annuity Payout Calculator or Retirement Withdrawal Calculator. The maths is two sides of the same coin: accumulation turns regular contributions into a future lump sum (future-value annuity), while payout turns a lump sum into a future stream of equal withdrawals (present-value annuity). For example, use this calculator to find you can accumulate about HK$1 million by retirement, then use the payout calculator to convert that HK$1 million into a safe monthly draw over, say, 20 years. A complete retirement plan needs both stages: confirm the accumulation stage's contributions and term can hit the target, then check the payout stage to see how long the money lasts. This calculator alone gives you 'the lump sum at retirement'; to turn it into 'monthly retirement income' you need the payout-stage tool. Use both together to link your savings goal with your retirement withdrawals.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.